Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective

OIA: changes in RB practice and in law needed

Just before Christmas, I drew attention to the Reserve Bank’s new policy of charging for Official Information Act requests.At the time, this paragraph appeared on the Bank’s website.

The Reserve Bank has a policy of charging for information provided in response to Official Information requests when the chargeable time taken to provide the information exceeds one hour, and charging for copying when the volume exceeds 20 pages. Our charges are $38 per half hour of time and 20c per page for copying (GST inclusive).

That text has now been removed and they appear to have provided some rather more extensive material outlining the approach they are now planning to take. This is what is now stated on the website:

The Official Information Act allows the Reserve Bank to charge for preparing information that we send in response to requests. When charging for responses to Official Information requests, the Reserve Bank works within the guidelines published by the Ministry of Justice here – Official Information Act: Charging for Services. Charges are $38 per half hour of staff time after the first hour, and 20 cents per page for printed or copied material provided in response to a request, after the first 20 pages. The Reserve Bank is resourced to meet disclosure obligations for a reasonable level of Official Information requests and generally will not impose charges for small, simple or infrequent requests. If requests are made for large amounts of information that require substantial collation and research, the Reserve Bank’s first step is to work with the requester to refine the request to a smaller scale or scope that is less likely to involve charges. Where request is still chargeable and likely to be expensive, we will give the requester further opportunity to refine the scope of the request and thereby reduce or eliminate charges.

Basis for charging The cost of providing free responses to Official Information requests is generally borne by taxpayers. The Reserve Bank believes that requesters should bear some of the costs when requests are made for very large amounts of information, where a response to a request is particularly complex, or where individuals or organisations make very frequent requests.

Guidelines for charging Charges will be imposed for responses when preparation of the response involves more than one hour of chargeable collation, research and preparation work. If the Reserve Bank decides that information requested can be made available, but that charges are appropriate, we will formally advise the requester of:

our decision to release the information,

the estimated amount of proposed charges,

the basis for proposed charges, and

the requester’s right to seek an Ombudsman’s review of the proposed charges.

Remission of charges The need to pay charges may be modified or waived at the Reserve Bank’s discretion, if:

charges might cause financial hardship for the requester; or

releasing the information is likely to contribute significantly to public understanding of the Reserve Bank and its work, and release of the information is not primarily for the benefit or interest of the requester; or

if the information already in the public domain in a form which the requester could acquire without substantial cost.

As I noted before Christmas, it appears probable that the Reserve Bank’s general stance is legal, since the relevant provisions of the Official Information Act itself are quite short and permissive

Subject to section 24, every department or Minister of the Crown or organisation (including an organisation whose activities are funded in whole or in part by another person) may charge for the supply of official information under this Act.

Any charge fixed shall be reasonable and regard may be had to the cost of the labour and materials involved in making the information available and to any costs incurred pursuant to a request of the applicant to make the information available urgently.

Whether it is appropriate is quite another matter.

I discovered the new policy when the Bank sought hundreds of dollars to provide me copies of some easily accessible, non-contentious, very old minutes of meetings of the Reserve Bank Board. But I’m not now the only one to have been hit by the new policy. Richard Meadows of Fairfax was told he would have to pay a similarly large amount to progress several of his OIA requests, a step that has brought greater coverage to the issue. There were articles on Stuff last week (here and here), and yesterday the Dominion-Post editorialised on the Reserve Bank’s new policy, under the heading “An obstacle in the path of freedom”.

The Bank is, of course, bound by the law. But it also notes that it seeks to work within the charging guidelines approved by the then government in 2002. But it is not clear that it is really doing so.

For example, the Bank lists factors it would take into account in deciding whether to modify or waive any charges, but the list it uses is not the same as the list in the government’s charging guidelines. They state

7.1 The liability to pay any charge may be modified or waived at the discretion of the department or organisation receiving the request. Such decisions should have regard to the circumstances of each request. However, it would be appropriate to consider inter alia:

whether payment might cause the applicant hardship;

whether remission or reduction of the charge would facilitate good relations with the public or assist the department or organisation in its work; and

whether remission or reduction of the charge would be in the public interest because it is likely to contribute significantly to public understanding of, or effective participation in, the operations or activities of the government, and the disclosure of the information is not primarily in the commercial interest of the requester.

To comply with these guidelines the Reserve Bank first has to consider the circumstances of each request. And it is advised to consider whether “remission or reduction of the charge would facilitate good relations with the public” and whether “a remission or reduction in the charge would be the in public interest because it is likely to contribute significantly to public understanding of, or effective participation in, the operations or activities of the government”. The Bank states that it will consider remission or reduction if the request is “not primarily for the benefit or interest of the requester”, but that is hugely different phraseology than the one in the government’s charging guidelines, which talk about where “the disclosure of the information is not primarily in the commercial interest of the requester” – in other words, the test is whether the requester making money from the information in the request.

Yesterday, I was also informed that my request for material the Reserve Bank held relating to its involvement in the post-TPP Joint Macroeconomic Declaration (that our central bank and Treasury were party to, along with macroeconomic authorities in other TPP countries) would also be subject to a charge of $560.

There is no evidence in the letter from the Reserve Bank that they have considered the circumstances of the specific request. For example, as the Dominion-Post editorial notes, charges of this scale “would be a serious obstacle for any individual” and “if OIA requests routinely cost this much it would also be a problem even for large media outlets”. But I suppose it would not necessarily cause “hardship”

More pointedly, there is clearly no commercial benefit to me at all (let alone it being a “primary” factor) in making such a request. This blog is a non-commercial operation.

What about the wider public interest? Well, the government has been clear that it wants to encourage scrutiny and discussion of TPP issues now that the agreement has been signed. And yet, one press release apart, the Reserve Bank has published no background information about its involvement in the Joint Macroeconomic Declaration, and the Governor has not answered any questions about it. Against that background, a request of the sort I lodged seemed likely to assist public understanding of a new international commitment made by the Reserve Bank. The fact that the Reserve Bank itself constantly stresses the gains from transparency makes their stance on OIA requests in general, and this one specifically, particularly incongruous.

Perhaps the Bank wants to argue that publication on my blog would not advance the public interest (although I’m not sure how they would apply that reasoning to one of the country’s largest media groups). I have, of course, a smaller readership than the Fairfax publications, but by New Zealand standards it is a pretty significant number of people – including, but not limited to, officials, market analysts, journalists and politicians – with an interest in economic and financial policy and analysis issues in New Zealand. The official charging guidelines note that it is reasonable to ask whether requesters have a means of disseminating the requested material. As they note “in the case of the media, however, it can be reasonably assumed that they do have access to means of public dissemination”. The same might be said for requests from reasonably widely read bloggers – blogs not having been as common in 2002 when the charging guidelines were written.

But in any case, the Reserve Bank has itself created a platform for disseminating material, by adopting the (admirable) policy of releasing the results of many of the OIA requests it receives on its own website.

I suspect the change of Reserve Bank policy was prompted by the various requests I have lodged with the Reserve Bank over the last year or so. I haven’t gone back and checked each of them, but I’m pretty sure that in all cases (a) I have written about them here, thus giving dissemination to what the Bank has released (or refused to release) and (b) that all of them have had a focus on enhancing the understanding and scrutiny of a powerful public agency[1].

The Reserve Bank’s new stance is a serious misjudgement. The issue isn’t whether their stance is legal – it probably is – or whether, as applied to either Fairfax or me, it is in accordance with the government’s charging guidelines – it probably isn’t. The bigger issue is the one I have been highlighting for the last nine months. The Reserve Bank is a very powerful organisation, with a great deal of discretionary policy choice left (formally) in the hands of one unelected person. The Bank exercises far more discretion, in a much wider range of areas, than the designers of the Act – and especially of its governance provisions – ever envisaged. Against that backdrop, the Reserve Bank – and its Board and the Minister, both charged with responsibility for the Governor’s performance – really should be going out of its way to be open and transparent – not just on the things it wants to communicate to us, but in facilitating the sort of scrutiny and challenge that open and democratic societies thrive on. The questions might be awkward at times, and some of the angles oblique, but it is for citizens to define the questions and challenges, not the unelected bureaucrats.

It would tedious to go through once again all the areas in which the Bank fails to practice openness and transparency, but to take just three think of submissions on its regulatory proposals, background papers to the current PTA, and background papers on the substantial programme of work undertaken on possible reforms to the governance model. If the Bank is going to add to its generally obstructive approach – responding as slowly as possible, and releasing absolutely as little as possible while waiting out the Ombudsman – by making access to public information something only for those with deep pockets, it will simply further undermine any legitimacy or respect that it has. I would urge the Governor (and his committee) to rethink, and would encourage the Board, the Minister, and members of the Finance and Expenditure Committee to pick up the issue with the Governor. I welcome the fact that James Shaw, co-leader of the Green Party has already gone public on the issue.

More generally, as I have noted before, the Bank would be well-advised to consider adopting a much more pro-active approach to the release of background papers (akin to the pro-active approach taken by the Minister of Finance and the Treasury following each Budget). For example, the Bank might consider:

releasing all submissions on regulatory proposals on the website on the day submissions close,

releasing background papers to the Funding Agreement the day the Funding Agreement is released,

releasing background papers on any new PTA at the time of the signing of that PTA

releasing proper minutes of the OCR-advisory Monetary Policy Committee, and of the monetary policy meetings of the Governing Committee, say, six weeks after the relevant OCR release

releasing background papers to each Monetary Policy Statement immediately after the release of the subsequent Monetary Policy Statement

None of these would be extraordinary by the standards of other government agencies or international central banking.

There would, no doubt, still be matters on which people would lodge Official Information Act requests with the Reserve Bank, but the more open the Bank is upfront the less people will feel the need to lodge ad hoc requests.

More generally, this issue highlights the need for a more comprehensive reviews of the Official Information Act, including the role of the Ombudsman’s office and the charging regime. It may well be the Reserve Bank is isolated in its new stance – the No Right Turn blog is seeking the information on that. But as the Dominion-Post editorial puts it, the “default position should be to give the information free. Only in the most exceptional cases should this rule be breached”.

A reader has suggested that perhaps any proposal to charge should require the explicit advance consent of the Ombudsman’s office. That sounds sensible, provided the Ombudsman is properly resourced, but would require a change to the legislation. Legislation might provide that charges could be levied only for exceedingly complex requests (perhaps those taking more than 100 hours – and with decent document management systems how many should that be?) or where it is evident, on the balance of probabilities, that the primary benefit in releasing the information would be for the commercial interests of the requesters (although general release on a public website would presumably deal with what might otherwise be uncharged gifts to commercial operators). Perhaps there needs to be a separate provision for “vexatious requesters”, akin to vexatious litigants in the courts – but again that would be a matter for the Ombudsman to judge, and “asking awkward questions of powerful agencies” would not qualify of itself as vexatious.

We have sought to avoid a “dollar democracy”. The rich and powerful have no more voting rights than you or I. The same really should apply to the access to public information that enables us to evaluate and hold to account politicians and other officeholders (as it largely has in the way the OIA has been administered – for all its problems – by most agencies). Whether or not the Reserve Bank backtracks, it is time for Parliament to revisit the OIA and better fit it for an age when openness and transparency are seen as increasingly important. Part of that will be about a stronger culture (and obligation) to pro-actively disclose, part about better-resourcing the Office of the Ombudsman, and part is about ensuring that access to public information is not determined by the size of one’s bank account.

As I was just about to publish this I noticed an op-ed from the Reserve Bank’s Deputy Governor Geoff Bascand, defending the Reserve Bank’s stance in response to yesterday’s editorial. Readers can evaluate it for themselves, but I noticed this section

Since the policy was introduced we’ve responded to seven OIA requests and sought charges for two of them because most could be addressed without collating large amounts of information.

The particular charge that sparked recent commentary arose because providing the information requested would take an estimated 8½ hours of chargeable time (along with additional non-chargeable time).

As the Bank has sought charges for two of my OIA requests since the policy was changed, and Richard Meadows noted in the comments on my earlier piece that he was charged for three, this account seems not quite accurate. And I’m still waiting for a response to my September request for the submissions made to the Bank on its regulatory stocktake.

[1] As it happens, the Board papers I requested last year probably fitted those categories least (they were about (a) some background work on the origins of the Reserve Bank Act and the Board’s role, and (b) the interests of hundreds of present and former members of the Reserve Bank’s superannuation fund (I’m a trustee of the scheme and some difficult issues have arisen from that era)).

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8 thoughts on “OIA: changes in RB practice and in law needed”

Michael
As I’m sure you would agree, the RB produces many very helpful reports, it has excellent data services, and its staff actively and positively engage with the financial and commercial communities.
The RB is internationally recognised for its transparency and approach in the area of monetary policy.
My own interaction with RB people over the years has shown them to be nothing but helpful, and through events like “post-MPS breakfasts” they provide excellent and helpful explanations of their decisions.
However, no one and no thing is perfect.
I read Ben Bernanke’s book over the Christmas break and it provides an interesting counterfactual to how the NZ “Fed” is operated. Bernanke is a strong believer in transparency, engagement and public debate. He encouraged his fellow governors to publically express their views (while making sure that they understood that unity=strength when it came to the very hard decisions the Fed made over the GFC period).
No doubt the debate about which central bank best managed the response to the GFC will last for years, but several facts are undeniable. The USA recovered fastest of the G5, the Fed was able to get political backing for some very tough calls, and most other central banks followed the Fed’s initiatives (often after initially being critical of them).
The RBNZ model (in keeping with most regulatory agencies in NZ) is remarkably independent and closeted (your point). Bollard’s book on the Crash talks about a few dinners with the then head of Treasury and the then Minister of Finance, but there was nothing like the consensus building exercise and debate that happened in the USA.
Does this matter? Absolutely. Public servants are risk averse and regulatory agencies are prone to the “locked and loaded” approach. Im sure that Bernanke would not have been as courageous (his book is called The Courage to Act) had he been tucked away in some quiet room. There is no doubt that his interactions with other officials, politicians, media, the public, experts, bankers, etc. all contributed to the policy that was implemented.
Another point, least we forget, as at 30 June 2015 the RB had total assets of $29,019,000,000 and an annual net surplus of $624,000,000. Imagine a public company of that scale and its level of public engagement and interaction with investors, analysts, regulators, etc etc etc.
As noted, the RB is excellent in a lot of what it does, but your experience seems to illustrate a less than welcoming engagement with scrutiny except on their own terms.
This matters more now than in the past because the RB’s mandate has expanded hugely. The periodic reviews of the ORC are one thing. Setting the rules for the banks are another entirely. The former has a veritable industry of critics. The latter? I was involved in an initiative a few years ago to stop Michael Cullen shifting the regulation of the Australian owned banks to Australia. Its an esoteric area but it really matters.
It would be very interesting to hear the views of Bill English, Grant Robertson’s and Rod Carr.
Tim Brown

Interesting perspectives thanks Tim. I guess a huge difference between the US and NZ is the independent role of Congress and the associated lack of much party discipline. Simply convincing the equivalent of the Minister of Finance is often enough here, and hardly ever enough there – eg the difference between the guarantees here during the crisis, which the MOF could simply sign off on, and the US TARP which required huge effort to get Congress across the line.

All that said, Bernanke’s Fed was pretty resistant to some important Freedom of Information Act requests and to Congressional initiatives to provide greater official scrutiny of the Fed.

Re monetary policy transparency, you are right that the RB has a reputation in that area, but it is now quite ill-deserved. We were the first central bank to publish forward interest rate tracks and (I think) to hold press conferences, but the level of background information and information on alternative perspectives released in now well back in the second tier on central banks (behind the Fed, the Bank of England, the Riksbank, and in some respects even the RBA). In some respects the RB still trades on the reputation won in the first 10 years or so of the Don Brash era, itself substantially built on the foundations laid by Roderick Deane.

I have only just caught up with this issue via interest.co.nz. As far as I can tell the RBNZ (at least in the form of Geoff Bascand’s piece) have grossly misunderstood the OIA.

It’s pretty easy to track down the Ombudsman’s guidance on charging for OIA/LGOIMA requests. What I take from that document is that there cannot be any such thing as a policy on charging for requests and no such thing as waiving charges.

The basic rule is that each request must be taken on its own merits. Any decision on charging must be made after assessing the request and after assessing whether charges should not be made because of the two special circumstances: hardship and public interest.

What also caught my eye was the discrepancy in language between the Ombudsman and the RBNZ. Whereas Bascand “generously” allows for the possibility waiving charges when a release is “likely to contribute significantly to public understanding of the Reserve Bank and its work”, the Ombudsman blandly states “there is a public interest in the release of the requested information without a charge”.

I know its semantics but there is a huge difference in practice between donating the services of RBNZ whenever an OIA request furthers its own comms strategy (i.e is basically doing the bank’s PR work for it) and uncomplainingly handing over information to those who are engaged in public journalism (such as yourself) whether they like that information being public or not.

The tenor of the whole piece indicates to me that the RBNZ still deeply believe that the OIA does not apply to them.

I agree with you that the RB “policy” is not consistent with the government charging guidelines, but actually the way I read the Act itself, it is so permissive re charging that I think any agency could charge for almost any request. The interview with the Ombudsman in the Dom-Post the other day suggests he is quite happy with the RB policy – and he has to apply the Act, not the government’s guidelines to its agencies. I think the RB policy is very bad practice, but is probably legal – which is why I think the Act itself needs review (or at least central govt would have to make clear to agencies that it would not tolerate the sort of policy the RB has adopted – but central govt has quite limited leverage over the RB (only really at reappointment, and at the five yearly funding agreements).

Firstly the Office of the Ombudsman is not the arbiter of Freedom of Information it is more like a consultant with some investigatory powers. Only the courts can actually provide a remedy if there has been a breach of the Act. Up until now the general respect for the Ombudsmen has meant that recommendations from that office have been treated as though they were binding (even though they aren’t). From what I read, Prof Kelsey’s successful case against MFAT is the first time an OIA case has got to court. And the court reversed the opinions of the Ombudsman. Ironically the court also affirmed the Ombudsman’s own published guidelines. I take it from that that the Office of the Ombudsman is not going through one of its most effective phases (although the booting out of Dame Beverley Wakem in favour of Judge Boshier may make a difference). I.e. you don’t have to take their opinion on the RBNZ’s policy as having any definitive merit.

Once you take a case against the government in the courts certain principles apply regardless of the wording of any specific legislation. In particular government actions and policies have to be fair and reasonable. A technically legal action by the government can still fall foul of the courts. The higher courts will also consider the policy intent behind the legislation. In that context I doubt that the RBNZ’s policy would withstand much of a challenge unless it were very carefully worded. So when you say “probably legal” I suspect what you actually mean is “not obviously illegal”.

If I have read correctly the RBNZ policy is along the lines of “we will charge x dollars/hour for any request that takes more than one hour to complete”.

A policy worded that way is likely to be struck down instantly in court for the simple reason that a published policy worded that way is a deterrent to a potential requester seeking information and is, therefore, in violation of the principles of the OIA (see ss 4 & 5).

There are a couple of other arcane arguments I could muster although they relate more to thresholds and quantum than to the basic principle.

Sorry to nit-pick but the Ombudsman is a parliamentary office not government. A government could require ministries and departments under its direct control to act more transparently but I can’t imagine any scenario in which any government would do that. So really it comes back to the courts. The Act itself is constitutional. Amongst other constitutional elements the RBNZ has a statutory board and some statutory responsibilities, it has to manage its finances in line with international standards, it has to comply with NZ employment law and has to operate transparently. In theory the principles of the OIA are supposed to be built into the RBNZ from the top down. So, again in theory, it doesn’t require any guidance or direction from government on how to be accountable to the public.

Re the Ombudsman, yes it is fair to note that his opinion is not definitive, although it tends to be that way for most citizens (given the huge barriers to seeking judicial remedies) – ie it is the only low cost (if extremely slow) place to seek review of an agency decision. As for what the courts would say if something like the Rb charging policy was challenged, who knows, but bear in mind that the judge in the Kelsey case did explicitly draw attention to the charging options open to Tim Groser (in what was a fairly wide-ranging request).

Note that the RB policy is not as baldly worded as you suggest, as they note a variety of grounds on which they might waive charges (altho as you and I have both noted here, their list is materially different in important respects than the govt guidelines for charging).

I’m less negative on the possibility of a government adopting a more serious approach to consistently open government – altho the incentives over time are such that any change of emphasis would require legislation to make it enduring. Personally, I’d rather these issues were resolved by Parliament than by some creative judicial interpretation.